>> from the heart of her innovation, money, and power

collide, in silicon valley and beyond, this is bloomberg technology, with emily chang. ♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." a bloomberg scoop, apple plans to slow hiring and spending. we have the inside scoop on how they plan to do with it. netflix says stranger things was even bigger than expected. after dismal start to the year, stranger things have happened. bitcoin rally, jumping as much as 7% for the first time in weeks. what is driving the rebound? later this hour. first let's get a look at the market. stock slow down after the bloomberg scoop that apple plans

to slow hiring and spending. taylor riggs is here to walk us through the day. taylor: equity markets, about tenant -- 10 minutes before 2:00 when i went on air, all of it started to unwrap -- unravel with that headline you just mentioned. the nasdaq 100 off about .9%, certainly the big underperformer on that news. we will circle back and get to that in just a moment. more about some of those stories. i wanted to talk about ibm as well, just after the closing bell off about 1%. overall, the topline numbers look good. they didn't mention the headwind when it comes to the dollar but there still some concerns when it comes to how were thinking about these companies navigating some of these recessionary challenges that may be coming up

on us. finally, let's look at some of the individual sectors. you mentioned netflix after hours dropping about 1%. stranger things is scary to me and i cannot watch it. disney, a great story as well. 40% online, so the earnings results we get starting with netflix and the streaming environment, finally apple, the story of the day. one of the biggest one-day slides we've had going back in a few weeks. emily: as taylor mentioned, apple plans to slow hiring and spending growth next year, according to bloomberg sources. they are still planning and aggressive product launch schedule including a new mixed

reality headset. the news taking investors by surprise. mark, what exactly have you learned about apple's plans? mark: we learned that the company is going into fiscal 2023 and taking a more cautious approach to its investing and spending when it comes to harming. you will see some departures over the next year or so through normal attrition. in order to save a little bit of money and be cautious there, you will probably see them have headcount even instead of upgrading their headcount between 10% and 15%. they will be spending less money in certain divisions as well, all in preparation for the looming recession and the economic downturn that people are concerned about coupled with inflation. emily: talk about why the market is so surprised by this and concerned by this, given that

apple, weathered the pandemic pretty well, also a bellwether for consumer sentiment. mark: that is exactly right, because apple is a bellwether, the market and analysts and people who invest trust apple to make decisions ahead of time. if you remember when covid started to happen in the beginning of 2020, they were some of the first to be in closing their stores and putting in measures to get the impact. apple has shown it has good insight and good research to understand when economic situations are going to happen. at the same time, i don't think it is hugely surprising given that we've seen meta and tesla and amazon, microsoft, all make similar moves. instead of tim cook sending out a memo detailing their plans for 2022 and 2023 when it comes to the economic downturn, they are not going to announce it publicly. that's why we are reporting it based on sources as we see other

companies do. apple doesn't believe it will have a major impact on consumers or employees. you're probably not going to see layoffs or major changes to their pipeline and their long plan. i am still expecting an announcement of the new major -- first new major product announcement in years to happen sometime in 2023. there will be a big iphone and apple watch update, a larger ipad, so there is a lot in store for next year that the company still wants to get out to consumers. emily: another store you are following, apple being sued over pay and antitrust violations. mark: this one is a long time coming. apple is the only company that has tapped to pay software on their phones. when you tap your phone to make

payment, that is only through -- they are not able to develop their own application in order to use the near field communications chip that allows tapped to pay on the iphone. now you see a consortium through a class-action suit to benefit consumers. that is happening now. they are upset that apple is keeping that feature exclusive to its own service then charging what they say are higher than normal rates, and those rates being passed on to payment processing companies. emily: mark will keep the scoops coming, thanks so much for joining us. coming up, will the metaverse really change life as we know it? my next guest says yes, indeed, and big time. he will tell us how, next. this is bloomberg. ♪

emily: in the next couple of decades, today's internet will undergo a multitrillion dollar transformation to an interconnected 3d virtual world for us known as the metaverse, or so some tech interest say. think virtual malls, where we shop, work, play and more. in the new book, the metaverse and how it will revolutionize everything, the author offers a glimpse into this new reality. matthew joins us now from l.a. the question is when, so much of the progress made on the so-called metaverse so far seems to be pretty basic. when our our lives going to be

"revolutionized"? matthew: we should keep in mind that technological advances take time. we get the first consumer media services on mobile devices, blackberry, the iphone, in the early 2000's. what is clear now with the advent of real-time 3d as we talk about industrial applications, the advent in live patient surgery and the fact that hundreds of millions of people typically under the ages of 25 are all living in 3d worlds. emily: so not you are me yet, no offense, but what about how this is going to change our daily lives? you are joining us now remotely, would it seem like you are here

in the studio in this new world? matthew: that is certainly one element. they talk about the idea of co-location, but in some instances, we will still be using some of the devices we use now but we might be doing it in 3d displays. we might be sitting thousands of miles apart looking at it screen , but the actual presentation would be in 3d. emily: you've had your metaverse etf going, snap views the metaverse is so different from meta, where mark zuckerberg's vision has been called hypothetical. a more augmented reality over real physical reality.

a new web version of snap almost seems like it's going backwards. how do we square these two visions? matthew: the way we square it is by ignoring the term all together. you find there is no concrete definition. some believe it fundamentally requires crypto. others have augmented reality centered belief. under the classical definition where were talking about real-time 3d, you might talk about augmented reality lenses, org zuckerberg might talk about the virtual world with all your other vision cut off. they will still be interconnected in some shape or form. emily: let's talk about how it changes the world of streaming. you are a long time former amazon studio executive. how does it change the way we

watch what we watch, and how? matthew: it's a great example of what is already in the world today. using a game engine, a real-time 3d simulation, they can create the perfect sunset and hold that sunset in place. they can pull out the entire book -- and tardy of that virtual set and reshoot it and make it available on your peloton or videogame console in virtual or augmented reality. that's a way we will start to see in attainment change. talking about the idea you might be able to just play games on the smartphone. emily: netflix earnings are coming up. we've been talking about the success of "stranger things," and what would you bet is going

to happen here? are they going to buck the trend that we saw earlier or will we see a slow degradation in the number of subscribers for a while? matthew: it's clear by all benchmarks that stranger things season four was as accessible -- third-party analytics show some are weaker than we hope for. one company shows that netflix ranks second last in terms of subscriber retention after 30 day sign-ups. there also at a four year high for the oversaw -- overall services term of retention. even if it was a strong quarter for ads, the elevation will likely be offset. emily: lord of the rings, the new series, jeff bezos tweeted out the trailer last week. you think it will be a megahit

like stranger things has been for netflix? matthew: stranger things is still breaking records seven years later. i think it will be one of the most significant things that amazon overall does in 2020 absolutely. emily: what is your take on the overall tech market dynamic? we got this negative news from apple that they will slow down spending gross and slow down hiring. apple is long considered a bellwether for consumer sentiment. are you taking that as a bag -- bad signal for the rest of big tech for the foreseeable future? matthew: is not encouraging, certainly, when you look at how many other creators and founders and products and services rely on the iphone and the incremental improvements for every device refresh. receiving separate from apple, the video game industry was down

last year, we're looking at a broad situation where consumer electronics, entertainment, all are getting threatened. the draw from crypto markets is exacerbating things from a demographic view. emily: nice to have you seek -- have you here and we are excited about your new book. matthew ball, thank you. coming up, could elon musk's bid for twitter somehow be good for twitter's relationship with china? our next guest think so. he is back to talk to us about the future of china-u.s. tech relations and more. this is bloomberg. ♪

as a main street bank, pnc has helped over 7 million kids develop their passion for learning. and now we're providing 88 billion dollars to support underserved communities... ...helping us all move forward financially. pnc bank: see how we can make a difference for you.

emily: the world's biggest maker of batteries for electric cars is considering at least two locations in mexico or manufacturing plant. the company could be positioning itself to grow its market share in north america. the potential sites are near the texas border and the company is planning to invest as much as $5 billion in this project. meantime china is facing a slew of new challenges as its economy buckles amid stringent coded -- covid zero policies.

residents refusing to pay their mortgage payments, and typically vibrant hong kong is struggling to recruit and retain new talent. so how will this all impact the tech sector? i want to bring in ivan stone fish who brings -- works with companies with exposure to china. good to have you back here on the show. when you look at china right now , is it still the place to put your money? ivan: it depends on where you -- for so long, people have been is pricing the risk of investments in china and now that the risks are so much more clear, they are able to step back and say, oops. emily: is the center of gravity moving from beijing to hong kong, or from hong kong to singapore, where conditions are more predictable isaac: i think

a lot of people in the text seeing like the idea of it being decentralized. china certainly is the center of the tech seen in asia, but it is really too early to see whether they have a global tech scene. chinese entrepreneurs have long succeeded despite the common's party and the conditions of china as their space grows narrower and narrower. i think we will see more of an exodus of talent to other parts of the world. emily: will the covid policies have a long-term impact will this be an inflection point? isaac: the metaphor of a guy stepping on someone else's neck and other people looking for solution, and the solution is, take your foot off his neck. there are huge emotional damages in the cruel lockdown that they pad. yes, it will have long-term

effects. emily: meantime you have companies like tiktok just continuing to thrive. do you think u.s. social media companies will ever be able to catch up? isaac: i think they will. the game that tiktok is playing is how can it seem as un-chinese as possible in the united states? the better it will be fort mehta and google and microsoft and even oracle. emily: you have some interesting analysis on the elon musk-twitter debate. you think his -- the drama in general could be good for twitter's relationship with china, which is interesting given that twitter has been blocked in china since 2010. isaac: musk, for someone who is

such a free-speech avatar, has a massive blind spot when it comes to china and refuses to criticize the chinese communist party in a way that is especially egregious for someone who is so open and no holds barred with so many other people. it feels like employees of twitter will read between the lines and say we don't need to be so aggressive in labeling chinese accounts, we don't need to push back against this kind of information and see this as misinformation. tesla is in china, why can't twitter be in china? emily: so you think of elon musk's does the deal as he promised and takes over twitter it could be an entree for twitter back into china? isaac: i don't think it will necessarily be good for twitter's bottom line. it was certainly change the way the social media platform works.

we see tesla on one side which is heavily exposed to china. spacex on the other side, and twitter will fit somewhere in between. i think it's possible they might fit closer to the tesla model than the spacex model. emily: how optimistic are you about the future of tesla in china? isaac: i think it depends on how far musk is willing to bend. there's a lot of concerns in china about tesla as a national security right because of all the data it collects. i assume that musk will be happy to continue yielding to the chinese communist party with sharing data, with doing things like opening a showroom in a region in northwest china where upwards of a million muslims have been in concentration camps. i think we will continue to see similar behavior. the thing that would change it is if musk decides to be more heavily involved in politics and

thinks it's just too much of a liability for me, but i don't see that is very likely. emily: the weight tictac handles its data and whether or not it shares with the chinese government, what is your take? isaac: i think what people need to understand, and it transitions to an even darker topic, but if the u.s. and china go to war over taiwan over the south sea or vietnam or any country in the region, all of chinese companies and u.s. companies will be seen as enemy combatants. the threat with tiktok is less that someone is using tiktok new jersey in the chinese common's party is watching that in real time, but the way that data, that information come of that location tracking can be weaponized if beijing so chooses. emily: dark indeed. thank you for taking us there and for joining us here in the studio. isaac stone fish, good to have

you here. speaking of twitter, some headlines just crossing now about twitter's feud with elon musk. saying he does not have enough information about spam and bought accounts. saying it's an irrelevant sideshow, urging -- expecting the first hearing in this legal saga tuesday. we will be back with more "bloomberg technology." this is bloomberg. ♪

emily: despite the major success

of the latest season of "stranger things" netflix investors have been bracing for subscriber losses. shares are down, inflation has forced consumers to be more selective, but shares jumped to kick off a week ahead of earnings. why are shares climbing ahead of what is expected to be a not so great report? >> optimism that things will be better than expected. netflix had forecast they would lose 2 million subscribers in the quarter, which would be their worst quarter ever. meaning for the year they would've lost 2.2 million. there is some optimism based on reporting third-party analysis and just the obvious success of "stranger things, that maybe they will lose 500,000 or one million instead of 2 million. i also think the last time around, they've done a better job over the last couple of months of trying to explain what some of it means.

emily: there's been some change of talking of -- of changing the binge watching strategy, releasing episodes weekly, for example. i guess stranger things have happened, pun intended. lucas: starting with the release of "stranger things", they, the batch approach where they will release the season in two installments instead of all at once. i think you will see a lot more of that, or maybe in three. i don't think you will ever see them go without weekly model that's been popularized and a lot of tv, but they are seeing a benefit in releasing 4-6 episodes at a time and then spacing it out, because it reduces the number of people who are canceling if they know they need to stick with netflix for at least two or three months. emily: they did that with "ozark," too. i found it really

frustrating. lucas: i think what you see based on some of the third party data is there is a secondary spike in viewership. that seems like a good thing if your desires to make sure that people are coming back to netflix on a regular basis. emily: there's also some reporting about hulu growing more than even disney plus. disney is a big stakeholder in hulu. what are these clues telling us about what consumers want and what services are going to run them all? lucas: from third-party data, hulu may be doing better than disney plus right now. disney plus is still larger than hulu by a lot, especially worldwide. the question looming over disney

is, are they going to end up buying comcast out of it, do they want to keep it independent? that being said, who is on a really good -- hulu is on a really good streak of programming. some of it is the other services, disney plus, hbo max and apple tv plus, have given viewers a lot of alternatives online. used to be that netflix was the default for most people if they wanted to watch tv or stream. that is just not the case anymore. emily: meantime you have amazon coming out with "lord of the rings," long anticipated. who stands to gain the most from a potential decline in netflix subscribers? is it disney plus, amazon? lucas: disney has argued -- hbo max has been growing at a steady clip. paramount is one of the

fastest-growing services, at least in the u.s. amazon has been added for as long as netflix and has been second or third fiddle to them the whole time. they're trying to get their act together. lord of the rings is the biggest swing, and they certainly hope that works. apple some would argue has done a better job of programming over the last couple of years. emily: lots to keep watching with netflix results out later this week. thank you, as always. one of the industries most profoundly changed by the pandemic has been health care, accelerating the progress of telemedicine and more. a women run investment fund supports brands that make -- focus on making the daily lives of consumers healthier. there is a study on how they are navigating the new complexities of health care. amanda, thank you so much for

being here. talk about this report and what surprised you most about these findings? >> the most surprising finding about gen z, they may not want to go back to the office full-time but they want to see their health care providers in person. we asked their preferred communication method with health care providers and they chose in person communication well above any other form of communication. we asked them their top criteria when you see a health care provider, and they chose convenient location as their top criteria and telehealth capabilities were last in the survey. emily: does that mean you should be investing less in telehealth? amanda: i think we need to dig a little deeper into the findings. the preferences for a hybrid solution. while they want to meet their

health care provider in person, when we asked them how often they want to hear back from the provider, the majority said they expect to hear back from a broader within a few hours when -- from a provider when they have a question or concern. they also want the opportunity for an in person connection. while the telehealth revolution has been oversold for this generation, there is a role for it. when you start looking at specific specialties, like mental health care, there could be a larger role. emily: so health care is operating in not only a post-covid but now a post roe world. what are the trends that stem from that? amanda: it rbc has the largest impact directly on providers of telehealth abortions. they've seen increase in demand as well as increased risk and liabilities as a result of that decision. when you think about the broader

impact, it has the potential to make employment and investment more or less appealing in any number of states. if you are an office in miami, in our survey we found that nearly half of gen z women were somewhat or very unlikely to take a job in a state that had restricted abortion rights. that number was 30% for men. if you're an employer and you looking at potentially 40% of your future workforce not wanting to work in your state, it doesn't matter where you stand on the political divide, that's just a business decision. further impact is we will see brother moves toward work from home policies. companies that can optimize that workforce will continue to have advantages. emily: how is all this infecting where you as an investor put your money? amanda: we are focused on a concept we call the wellness cap.

gdp per capita has gone up and to the right, consumers have had more money in their pockets. measures of physical and emotional well-being, those have been stagnant to down, particularly over the past two decades. we are most interested in companies that are looking to close that gap. we look at communities that have been underserved because of historical stigmas and that offers large market opportunities. emily: a wellness gap, interesting. thank you for joining us to tell us about it. we appreciate it. coming up, bitcoin rallying against the june crypto wipeout. we will talk about why, next. this is bloomberg. ♪

emily: time for our crypto report, bitcoin rallying, at one point trading above $22,000 for the first time since early june. and testing the upper range where it has been stuck for a few months. ether extending a rally that began last week after lock chain gave a target projected to lower the networks energy and other coins like avalanche, polygon.

we'll talk about this and more with hannah miller. why are we seeing bitcoin and other coins rallying right now? hannah: there has been some space between this rally and a huge downturn in price for cryptocurrency in mid june. bitcoin is sparking traders interest. it's hope that maybe bitcoin will break out of the $19,000-20 $2000 range. for either, news of the merger that could happen as soon as september has really sparked interest. emily: we had a guest last week that called it theory him a giant ponzi scheme. what do you make of that? -- that called ethereum a giant ponzi scheme. hannah: there are people that

are concerned about the safety and risk that it poses to investors. especially in light of what is happening with celsius and the withdrawal of various crypto lenders has put a lot of people on edge. emily: there are some new developments including celsius bankruptcy, all of this amid calls for more regulation. hannah: yes, we have a fuller picture of what is happening, we have a more detailed list today of creditors and it is a pretty interesting list. there are some really big names in the industry on their, and one of the cofounders' wife has a claim in. is pretty interesting to see how interconnected the industry is

an details are still emerging about celsius, and still untangling this web of what is happening. emily: hannah miller, thank you so much for all the updates. there are calls for more legislation and regulation in the crypto space overall. here's what a member of the alphabet board has to say about that earlier. >> regrettably, there's usually a calamity before there is explanation. the question is always, is the calamity big enough or does there need to be another let down before we get appropriate legislation? emily: my next guest founded a blockchain in digital assets team.

there have been a lot of big red flags, celsius, three arrows, you heard what marty chavez said about regulation. are we slated for a calamity? >> i find that a bit dramatic. we've seen a number of cycles in the industry. i've been in this space for seven years now and this is not the first time we've seen a big crash followed by pretty quick rally. as hannah mentioned earlier, we are starting to see a little bit of that rally start to happen. i don't know that we are waiting for a calamity. there has been skepticism around it but there's a lot of attention already paid. emily: what do you think is driving the rally, and how long does it last? it seems to be bad news everywhere else when it comes to the economy. >> that is right. there is a broader market meltdown happening.

i think it's profound that you're seeing individual coinstar to turn around and pick up a little bit. the idea that it's been a long time coming. the idea that there could be a transition from proof of work to proof of state. i know there's a 99.95% reduction, a massive reduction of energy. it has been a talking point for some folks in the space. is not so much about the energy usage but the fact is major technology change can be achieved, it's really complicated and hard to do. the details are so complex, but here we are for the first time seeing a massive change in the way the infrastructure is going to run. emily: i have to ask you about the comments we got last week

from one founder who basically called ethereum a giant ponzi scheme. you got major skeptics not just outside the industry but inside the industry who don't believe in it. >> one thing that is important to know about crypto is it tends to be pretty tribal. they are going to talk about their team as being the best team. with any industry, there are a bunch of options. in some cases pretty significant differences. the market is going to decide which of these things once up taking off which doesn't. i think it's natural to have somebody things fail and some grow. it is normal to see they may be favoring a different opportunity and talked about other opportunities in a negative frame. you see this quite a bit in the industry. emily: tribalism indeed.

where are you on the big debate about whether crypto is a security or a commodity? obviously that has major implications for how all of this will be regulated. sheila: you're seeing a lot of activity on the hill, kind of deciding what is the classification of this asset to determine not only who regulates it but some of the rules of engagement. what are you allowed to do, what about disclosures and how they happen. all of this will shape the way this develops. most things do start off to some degree, you have a group of people who are engaging in that build. several have evolved to be ready decentralized. there is a prong that talks about the engagement of others,

how much does the activity of one group of people really affect their efforts, how to set affect the price and all those things. in a decentralized system, there's an argument that is really strong that there is not -- it will not affect the way it tends to grow. it's a pretty strong idea that these are commodities. we will get to a place where more and more centralization is the norm. emily: we will see how that debate plays out. sheila warren, good to have you back here on the show. coming up, twitter response to elon musk. and the judge that was supposed to run the hearing. that's coming up. this is bloomberg. ♪

emily: it is a big week for the courts and the integrity of m&a. twitter has responded to elon musk ahead of tuesday's hearing. bloomington, delaware is where the hearing will go down. elon musk responded to the twitter suit, saying he needed more time to prove his argument in court, that twitter is trying to rush an office gate things. twitter has now responded to what elon musk had to say. where do you think saint -- where do you think things stand right now? jeff: it's a battle of two sides. twitter today basically said that mr. musk's arguments that they had not turned over enough information on spam and robot bots with the customer base was basically irrelevant, and a relevant slideshow, and he knew all along how many bots there were and this is a pretext to

walk away. basically we are at the stage now where the judge is going to have to decide whether to fast-track it and go for a trial in september or february or somewhere in between. emily: in another twist, the judge who would run the hearing now has covid. so the hearing that was supposed to be in person is still going to happen but it is going to be on zoom, is that right? >> that's right, the judge sent a letter out today saying she tested positive. we are pretty familiar with this. we did zoom hearings for the better part of two years, so it will be fine. emily: so what exactly is going to happen at this hearing? what will the judge decide? >> twitter has asked to basically what is called fast-track its lawsuit. that doesn't give you any specifics in terms of how fast,

but it means months rather than years. twitter says anything that passes the cloud over its shares is harming the company's value. that's why they are pushing for a sped up trial for september 19. mr. musk, on the other hand, says the case is way too complicated to try to compress discovery, pretrial information exchanges to that kind of period, and it really needs to be spread out so the trial should be held in february of next year. my suspicion is the judge will come down somewhere between those two dates. emily: what are experts telling you about whose cases stronger? -- use case is stronger? >> it is a case it will be decided by kathleen mccormick. many believe that twitter holds the stronger hand.

mr. musk waived due diligence on the bots before he signed a deal. but you just never know, things have to develop and there may be things that we don't know at this point. that's why they have two sides to every court case. emily: two sides indeed. thanks so much,jef. that does it for this edition of "bloomberg technology." tomorrow we will hear from a big investor in

this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. vo: when times get dark,

we can't see the help that's all around us. let 2-1-1 be your guiding light. for help with food, health care, and other resources. operator: 2-1-1, how can i help you? vo: call 211 or visit 211.org 2-1-1 get connected. get help.

♪